****UNITED
      STATES****


**SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
 
 **FORM
        10-Q**
  **[X]
        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT
        OF 1934**
 
 **For
        the quarterly period ended March 31, 2007**
  **OR**
 
 **[
         ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934**
 
 **For
        the transition period from ________ to ________.**
 
 **Commission
        File Number: 000-50484**
 
 **Marshall
        Edwards, Inc.**
 (Exact
        name of registrant as specified in its charter)


**DELAWARE**
            **51-0407811**(State
                or other jurisdiction of
            (I.R.S.
                Employer Identification No.)incorporation
                or organization)





**140
      Wicks Road, North Ryde, NSW, 2113 Australia**


(Address
      of principal executive offices) (Zip Code)





**(011)
      61 2 8877- 6196**


**Registrant’s
      telephone number, including area code:**








Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.  Yes x  No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):




Large
                accelerated filer o
            Accelerated
                filer o
            Non-accelerated
                filer x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  Yes
o  No x





As
      of
      April 30, 2007 the number of shares outstanding of the issuer’s common stock,
      $0.00000002 par value, was 63,390,937.







1


**MARSHALL
      EDWARDS, INC.**





**INDEX**








**PART
                I**
            **FINANCIAL
                INFORMATION**
            **Page**Item
                1:
            Financial
                Statements (Unaudited)Consolidated
                Balance Sheets as of March 31, 2007 and June 30, 2006
            3Consolidated
                Statements of Operations for the three months and nine months ended
                March
                31, 2007 and 2006 and for the period from December 1, 2000 (inception)
                through March 31, 2007
            4Consolidated
                Statements of Cash Flows for the nine months ended March 31, 2007
                and 2006
                and for the period from December 1, 2000 (inception) through March
                31,
                2007
            5Consolidated
                Statement of Stockholders’ Equity
            6Notes
                to Consolidated Financial Statements
            7Item
                2:
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operation
            19Item
                3:
            Quantitative
                and Qualitative Disclosures about Market Risk
            32Item
                4:
            Controls
                and Procedures
            33**PART
                II**
            **OTHER
                INFORMATION**Item
                6:
            Exhibits
            34**SIGNATURES**
            35








2


**PART
      I FINANCIAL INFORMATION**


Item
      1:
      Financial Statements





**MARSHALL
      EDWARDS, INC.**


**(A
      Development Stage Company)**


**CONSOLIDATED
      BALANCE SHEETS**


(In
      thousands, except share and per share data)





**March
                  31,**
              
              **June
                  30,****2007**
              
              **2006**(unaudited)**ASSETS**Current
                  assetsCash
                  and cash equivalents
              
              **$**
              **18,271**
              
              **$**
              **10,054**Deferred
                  offering costs
              
              
              **-**
              
              
              **95**Prepaid
                  expenses and other current assets
              
              
              **81**
              
              
              **246**Total
                  current assets
              
              
              **18,352**
              
              
              **10,395**Total
                  assets
              
              **$**
              **18,352**
              
              **$**
              **10,395****LIABILITIES
                  AND STOCKHOLDERS' EQUITY**Current
                  liabilitiesAccounts
                  payable
              
              **$**
              **860**
              
              **$**
              **420**Accrued
                  expenses
              
              
              **1,453**
              
              
              **638**Amount
                  due to related company
              
              
              **220**
              
              
              **202**Total
                  current liabilities
              
              
              **2,533**
              
              
              **1,260**Stockholders'
                  equity:Preferred
                  stock, $0.01 par value, authorized 100,000 shares,none
                  outstanding
              
              
              **-**
              
              
              **-**Common
                  stock, $ 0.00000002 par value, 113,000,000 authorizedshares;
                  shares issued and outstanding: 63,390,937 atMarch
                  31, 2007 and 56,938,000 at June 30, 2006
              
              
              **-**
              
              
              **-**Additional
                  paid-in capital
              
              
              **53,098**
              
              
              **34,636**Deficit
                  accumulated during development stage
              
              
              **(37,279**
              **)**
              
              **(25,501**
              **)**Total
                  stockholders' equity
              
              
              **15,819**
              
              
              **9,135**Total
                  liabilities and stockholders' equity
              
              **$**
              **18,352**
              
              **$**
              **10,395**





*See
      accompanying notes to the consolidated financial
      statements.*


3





**MARSHALL
      EDWARDS, INC.**


**(A
      Development Stage Company)**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


(In
      thousands, except share and per share data)


(Unaudited)


**Three
                  Months Ended**
                **March
                  31,**
              **Nine
                  Months Ended**
                **March
                  31,**
              **Period
                  from December 1,**
                **2000
                  (Inception) through**
                **March
                  31,****2007**
              
              **2006**
              
              **2007**
              
              **2006**
              
              **2007**Revenues:Interest
                  and
                  other income
              
              **$**
              **171**
              
              $
              101
              
              **$**
              **489**
              
              $
              353
              
              $
              1,588Total
                  revenues
              
              
              **171**
              
              
              101
              
              
              **489**
              
              
              353
              
              
              1,588Operating
                  expenses:Research
                  and
                  development
              
              
              **(1,446**
              **)**
              
              (1,033
              )
              
              **(4,179**
              **)**
              
              (2,088
              )
              
              (14,359
              )License
                  fees
              
              
              **-**
              
              
              (2,000
              )
              
              **(5,000**
              **)**
              
              (4,000
              )
              
              (17,000
              )Selling,
                  general and administrative
              
              
              **(447**
              **)**
              
              (320
              )
              
              **(3,087**
              **)**
              
              (1,098
              )
              
              (7,505
              )Total
                  operating expenses
              
              
              **(1,893**
              **)**
              
              (3,353
              )
              
              **(12,266**
              **)**
              
              (7,186
              )
              
              (38,864
              )Loss
                  from operations
              
              
              **(1,722**
              **)**
              
              (3,252
              )
              
              **(11,777**
              **)**
              
              (6,833
              )
              
              (37,276
              )Income
                  tax expense
              
              
              **(1**
              **)**
              
              -
              
              
              **(1**
              **)**
              
              -
              
              
              (3
              )Net
                  loss arising during development stage
              
              **$**
              **(1,723**
              **)**
              $
              (3,252
              )
              **$**
              **(11,778**
              **)**
              $
              (6,833
              )
              $
              (37,279
              )Net
                  loss per common share:Basic
                  and diluted
              
              **$**
              **(0.03**
              **)**
              $
              (0.06
              )
              **$**
              **(0.19**
              **)**
              $
              (0.12
              )Weighted
                  average common shares outstanding
              
              
              **63,390,937**
              
              
              56,938,000
              
              
              **63,131,878**
              
              
              56,938,000














*See
      accompanying notes to the consolidated financial
      statements.*


4





**MARSHALL
      EDWARDS, INC.**


**(A
      Development Stage Company)**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


(In
      thousands)


(Unaudited)











**Nine
                Months Ended**
              **March
                31,**
            **Period
                from**
              **December
                1, 2000 (Inception)**
              **through**
              **March
                31,****2007**
            
            **2006**
            
            **2007****Operating
                activities**Net
                loss arising during development stage
            
            **$**
            **(11,778**
            **)**
            $
            (6,833
            )
            $
            (37,279
            )Adjustments
                to
                reconcile net loss to net cash(used
                in) provided by operating activities:Share
                based payments
            
            
            **1,642**
            
            
            -
            
            
            1,642Changes
                in operating assets and liabilities:Prepaid
                expenses and other current assets
            
            
            **165**
            
            
            (335
            )
            
            (81
            )Accounts
                payable
            
            
            **440**
            
            
            (114
            )
            
            860Accrued
                expenses
            
            
            **815**
            
            
            137
            
            
            1,453Amounts
                due to related company
            
            
            **18**
            
            
            770
            
            
            220Net
                cash used in operating activities
            
            
            **(8,698**
            **)**
            
            (6,375
            )
            
            (33,185
            )**Financing
                activities**Net
                proceeds from issuance of common stock *
            
            
            **16,915**
            
            
            -
            
            
            51,456Proceeds
                from
                disposal of investments in short-term deposits
            
            
            **-**
            
            
            10,000
            
            
            -Net
                cash provided by financing activities
            
            
            **16,915**
            
            
            10,000
            
            
            51,456Net
                increase (decrease) in cash and cashequivalents
            
            
            **8,217**
            
            
            3,625
            
            
            18,271Cash
                and cash equivalents at beginning of period
            
            
            **10,054**
            
            
            9,238
            
            
            -Cash
                and cash equivalents at end of period
            
            **$**
            **18,271**
            
            $
            12,863
            
            $
            18,271




*
      Deferred offering costs of $95,000 from the year ended June 30, 2006 have been
      offset against net proceeds from the issuance of common stock in the nine months
      to March 31, 2007.























*See
      accompanying notes to the consolidated financial statements.*








5


**MARSHALL
      EDWARDS, INC.**


**(A
      Development Stage Company)**


**CONSOLIDATED
      STATEMENT OF STOCKHOLDERS’ EQUITY**


(In
      thousands, except share data)


(Unaudited)





**Common
                  Stock**
              
              **Additional
                  paid in capital**
              
              **Deficit**
                **accumulated**
                **during**
                **development**
                **stage**
              
              **Total***(shares)***Balance
                  at June 30, 2006**
              
              
              **56,938,000**
              
              **$**
              **34,636**
              
              **$**
              **(25,501**
              **)**
              **$**
              **9,135**Net
                  loss arising during development stage
              
              
              
              
              
              
              
              
              **(11,778**
              **)**
              
              **(11,778**
              **)**Comprehensive
                  Loss
              
              
              
              
              
              
              
              
              
              
              
              **(11,778**
              **)**Common
                  Stock issued July 11, 2006
              
              
              **6,329,311**
              
              
              **16,820**
              
              
              
              
              
              **16,820**Shares
                  issued as share-based payment (refer Note 6)
              
              
              **123,626**
              
              
              **443**
              
              
              **-**
              
              **$**
              **443**Warrants
                  issued as share-based payment (refer Note 6)
              
              
              
              
              
              **1,199**
              
              
              **-**
              
              **$**
              **1,199****Balance
                  at March 31, 2007**
              
              
              **63,390,937**
              
              **$**
              **53,098**
              
              **$**
              **(37,279**
              **)**
              **$**
              **15,819**

















*See
      accompanying notes to the consolidated financial statements.*





6


**MARSHALL
      EDWARDS, INC.**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**


**March
      31, 2007**








**1.**  **The
      Company and Summary of Significant Accounting Policies**





Marshall
      Edwards, Inc. (“MEI” or the
“Company”) is a development stage company incorporated in December 2000 as a
      wholly-owned subsidiary of Novogen Limited (“Novogen”). The Company commenced
      operations in May 2002 and its business purpose is the development and
      commercialization of drugs for the treatment of cancer. The Company is presently
      engaged in the clinical and pre-clinical development of the anti-cancer drugs
      phenoxodiol, NV-196 and NV-143. Novogen’s subsidiary has granted to the
      Company’s subsidiary, Marshall Edwards Pty Ltd (MEPL), worldwide
      non-transferable licenses under its patent right and patent applications and
      its
      relevant know-how to conduct clinical trials and commercialize and distribute
      all forms of phenoxodiol, NV-196 and NV-143 for uses in the field of prevention,
      treatment, and cure of cancer in humans, except topical applications.





The
      Company’s main focus since commencing operations has been to undertake human
      clinical testing of phenoxodiol. The Company has now reached agreement under
      the
      Special Protocol Assessment (SPA) process with the United States Food and Drug
      Administration (FDA) on the design of a pivotal study protocol for the
      investigational anti-cancer drug, phenoxodiol. The trial, known as the OVATURE
      study, is designed to test the ability of phenoxodiol to restore sensitivity
      of
      late-stage ovarian cancers to carboplatin, a standard form of therapy for
      ovarian cancer.





In
      May
      2006, the Company licensed two oncology compounds, NV-196 and NV-143, from
      Novogen. NV-196 is being developed initially in oral form for pancreatic and
      bile duct cancer and is currently in Phase I human testing. NV-143 is targeted
      for the treatment of melanoma, also in oral dose form, and is in pre-clinical
      testing stage. The Company will continue the clinical development and
      commercialization of these two additional drug candidates which will complement
      the current drug candidate, phenoxodiol, in the area of cancer.





**Principles
      of Consolidation**





The
      consolidated financial statements include the accounts of MEI and its
      wholly-owned subsidiary, MEPL. Significant intercompany accounts and
      transactions have been eliminated on consolidation.





**Estimates**





The
      preparation of the consolidated financial statements in conformity with
      accounting principles generally accepted in the United States requires
      management to make estimates and assumptions that affect the amounts reported
      in
      the financial statements and the accompanying notes. Actual results could differ
      from those estimates.





7


**Revenue
      Recognition**





*Interest*





The
      only
      revenue earned to date is interest on cash balances, which is recognized on
      an
      accruals basis.





**Cash
      and** **Cash
      Equivalents and Short Term Investments**





Cash
      on
      hand and in banks and short-term deposits are stated at their nominal value.
      The
      Company considers all highly liquid investments with a maturity of three months
      or less when purchased to be cash equivalents. Highly liquid investments with
      stated maturities of greater than three months are classified as short-term
      investments. The Company’s cash, held in the United States, is deposited in
      financial institutions that are FDIC insured. These deposits are in excess
      of
      the FDIC insurance limits. The Company also holds cash with Australian financial
      institutions.





**Income
      Taxes**





Income
      taxes have been provided for using the liability method in accordance with
      FASB
      Statement No. 109, “Accounting for Income Taxes.” Under this method, deferred
      tax assets and liabilities are recognized and measured using enacted tax rates
      in effect for the year in which the differences are expected to be recognized.
      Valuation allowances are established against the recorded deferred income tax
      assets to the extent that management believes that it is more likely than not
      that a portion of the deferred income tax assets are not re alizable.





**Fair
      Value of Financial Instruments**





The
      carrying amounts of the Company’s financial instruments, including cash and cash
      equivalents and accounts payable approximate fair value.





**Foreign
      Currency Translation**





The
      financial statements of MEPL have been translated into U.S. dollars in
      accordance with FASB Statement No. 52, “Foreign Currency Translation.” Assets
      and liabilities are translated into U.S. dollars using the exchange rates in
      effect at the balance sheet date. Income statement amounts have been translated
      using the average exchange rate for the periods. Realized gains and losses
      from
      foreign currency transactions are reflected in the consolidated statements
      of
      operations.





Translation
      of MEPL’s financial statements into U.S. dollars does not have a material impact
      on t he
      Company’s financial position.





**Research
      and Development Expenses**





Research
      and development expenses relate primarily to the cost of conducting human
      clinical and pre-clinical trials of phenoxodiol, NV-196 and NV-143. Research
      and
      development costs are charged to expense as incurred.





8


**License
      Fees**





Costs
      incurred related to the acquisition or licensing of products that have not
      yet
      received regulatory approval to be marketed, or that are not commercially viable
      and ready for use or have no alternative future use, are charged to earnings
      in
      the period incurred.





**Stock-Based
      Compensation**





The
      Company’s stock option plan provides for the grant of options to the Company’s
      directors, employees, employees of the Company’s affiliates and certain of the
      Company’s contractors and consultants. To date, no options have been issued
      under the plan.





Other
      stock-based payments have been accounted for in accordance with SFAS No. 123R
      “Share-Based Payments”. The Company therefore recognizes the cost of goods
      acquired or the expense for services received in a share-based payment
      transaction when it obtains the goods or as services are received. The Company
      recognizes a corresponding increase in equity or a liability depending on the
      classification of the share-based instrument granted.





**Basic
      and Diluted Loss Per Share**





Basic
      and
      diluted earnings or loss per share is calculated in accordance with FASB
      Statement No. 128, “Earnings Per Share.” In computing basic earnings or loss per
      share, the dilutive effect of stock options are excluded, whereas for diluted
      earnings per share they are included unless the effect is anti-dilutive. Since
      the Company has a loss for all periods presented, there is no dilutive effect
      of
      stock options.





**Comprehensive
      Loss**





Comprehensive
      loss is comprised of net loss and other comprehensive loss. Other comprehensive
      loss includes certain changes in stockholders’ equity that are excluded from net
      loss. Comprehensive loss for all periods presented has been reflected in the
      Consolidated Statement of Stockholders’ Equity.





**Stockholders’
      Equity**





Ordinary
      share capital is recognized at the fair value of the consideration received
      by
      the Company. Any transaction costs arising on the issue of shares are recognized
      directly in equity as a reduction in the share proceeds received.





**Deferred
      Offering Costs**





Where
      costs associated with a capital raising have been incurred at balance date
      and
      it is probable that the capital raising will be successfully completed after
      balance date, such costs are deferred and offset against the proceeds
      subsequently received from the capital raising.





9


**2** **.**  **Loss
      Per Share**





The
      following table sets forth the computation of basic and diluted net loss per
      common share:




**Three
                  Months Ended March 31,**
              **Nine
                  Months Ended March 31,****2007**
              
              **2006**
              
              **2007**
              
              **2006***(In
                  Thousands, except share and per share data)***Numerator**Net
                  loss arising during development stage
              
              
              (1,723
              )
              
              (3,252
              )
              
              (11,778
              )
              
              (6,833
              )Effect
                  of dilutive securities
              
              
              -
              
              
              -
              
              
              -
              
              
              -Numerator
                  for diluted earnings per share
              
              $
              (1,723
              )
              $
              (3,252
              )
              $
              (11,778
              )
              $
              (6,833
              )**Denominator**Denominator
                  for basic earnings per share:Weighted
                  average number of shares used in computing net loss per share,
                  basic and
                  diluted
              
              
              63,390,937
              
              
              56,938,000
              
              
              63,131,878
              
              
              56,938,000Effect
                  of dilutive securities
              
              
              -
              
              
              -
              
              
              -
              
              
              -Dilutive
                  potential common shares
              
              
              63,390,937
              
              
              56,938,000
              
              
              63,131,878
              
              
              56,938,000Basic
                  and diluted earnings per share
              
              $
              (0.03
              )
              $
              (0.06
              )
              $
              (0.19
              )
              $
              (0.12
              )






During
      the period presented, the Company had warrants outstanding that could
      potentially dilute basic earnings per share in the future, but were excluded
      from the computation of diluted net loss per share as the effect would have
      been
      anti-dilutive. Since the Company has a loss for all periods presented, diluted
      and basic earnings per share are the same. The outstanding warrants consist
      of
      the following potential common shares:








**As
                at March 31,****2007**
            
            **2006**Warrants
                exercisable prior to December 18, 2006 at an exercise price of
                $9.00
            
            
            -
            
            
            2,392,000Warrants
                exercisable prior to July 11, 2010 at an exercise price of
                $4.35
            
            
            2,815,258
            
            
            -Common
                shares issuable upon exercise of outstanding warrants
            
            
            2,815,258
            
            
            2,392,000




The
      2,392,000 warrants exercisable prior to December 18, 2006 have expired. No
      shares of common stock have been issued as a result of exercise of any of these
      warrants.





During
      July 2006, the Company issued 6,452,937 shares of common stock and 2,815,258
      warrants in connection with a PIPE capital raising and to secure a Standby
      Equity Distribution Agreement. For further details see Note 6
“Equity”.








**3.**  **Expenditure
      Commitments**





At
      March
      31, 2007, the Company had contractual obligations for the conduct of clinical
      trials, pre-clinical research and development, manufacture of clinical trial
      drug supply and manufacturing process development of approximately $9,466,000.
      Of the expenditure commitments, clinical trial amounts are based on the
      assumption that all patients enrolled in






10


clinical
      trials will complete the maximum number of allowed treatment cycles. The
      amounts, assuming all treatment cycles are completed, are expected to be
      incurred as follows:





(In
                  thousands)
              
              
              
              Payment
                  due by period**Contractual
                  Obligations**
              
              **Total**
              
              less
                  than
                1
                  Year
              
              1
                  -
                  3
                Years
              
              3
                  -
                  5
                Years
              
              More
                  than
                5
                  YearsPurchase
                  Obligations
              
              $
              9,466
              
              $
              6,108
              
              $
              3,023
              
              $
              335
              
              $
              -Total
              
              $
              9,466
              
              $
              6,108
              
              $
              3,023
              
              $
              335
              
              $
              -






No
      amounts have been included for future payments to Novogen which may arise in
      connection with the license agreements for phenoxodiol, NV-143 and NV-196,
      the
      services agreement or the manufacturing license and supply agreement as future
      payments under the terms of the agreements are subject to termination
      provisions. Payments in connection with these agreements are detailed in Note
      5
“Related Party Transactions”.





The
      Company is not currently a party to any material legal proceedings.





The
      Company’s certificate of incorporation provides that it will indemnify Novogen
      in connection with certain actions brought against Novogen by any of the
      Company’s stockholders or any other person.





In
      May
      2002, the Company entered into a guarantee and indemnity agreement pursuant
      to
      which the Company has guaranteed the payment and performance of the obligations
      of its subsidiary, MEPL, to Novogen and its subsidiaries, Novogen Laboratories
      Pty Limited and Novogen Research Pty Limited, under the license agreement for
      phenoxodiol, the manufacturing license and supply agreement and the services
      agreement. Novogen has guaranteed the performance of the obligations of Novogen
      Research Pty Limited under the license agreement for phenoxodiol and the
      obligations of Novogen Laboratories Pty Limited under the manufacturing license
      and supply agreement to MEPL. Each of the Company and Novogen’s obligations in
      the guarantee and indemnity agreement are absolute, unconditional and
      irrevocable.





The
      Company has issued a letter of support to the Directors of MEPL guaranteeing
      financial support, for a period of twelve months ending October 3, 2007, should
      it be unable to meet any of its financial commitments.








11


**4.**  **Segment
      Information**





The
      Company’s focus is to continue the clinical and pre-clinical program currently
      underway for the development and commercialization of phenoxodiol, NV-143 and
      NV-196. The business contains two major segments based on geographic location.





**Three
                  Months Ended**
                **March
                  31, 2007**
              **Three
                  Months Ended**
                **March
                  31, 2006***(In
                  Thousands)*USA
              
              Australia
              
              USA
              
              AustraliaLoss
                  from operations
              
              $
              (21
              )
              $
              (1,702
              )
              $
              (40
              )
              $
              (3,212
              )Segment
                  assets
              
              
              14,971
              
              
              3,381
              
              
              7,452
              
              
              5,872**Nine
                  Months Ended**
                **March
                  31, 2007**
              
              **Nine
                  Months Ended**
                **March
                  31, 2006***(In
                  Thousands)*USA
              
              
              Australia
              
              
              USA
              
              
              AustraliaLoss
                  from operations
              
              $
              (1,875
              )
              $
              (9,903
              )
              $
              (138
              )
              $
              (6,695
              )


**5.**  **Related
      Party Transactions**





**License
      Agreement for Phenoxodiol**





In
      September 2003, the Company entered into a license agreement pursuant to which
      Novogen’s subsidiary, Novogen Research Pty Limited, granted to MEPL a worldwide
      non-transferable license under its patents and patent applications and in its
      know-how to conduct clinical trials and commercialize and distribute phenoxodiol
      products. The license agreement covers uses of phenoxodiol in the field of
      prevention, treatment or cure of cancer in humans delivered in all forms except
      topical applications. The license is exclusive until the expiration or lapsing
      of the last relevant Novogen patents or patent applications in the world and
      thereafter is non-exclusive. MEPL may terminate the agreement by giving three
      months’ notice to Novogen. MEPL paid $5,000,000 to Novogen in February 2004
      which was the first lump sum license fee payment due under the terms of the
      license agreement. Also, MEPL paid $2,000,000 to Novogen in January 2005 and
      $4,000,000 in January 2006 which were the annual milestone license fee payments
      due under the license agreement. The Company paid a second lump sum license
      fee
      of $5,000,000 to Novogen in July 2006 following the raising of funds in a
      private placement. This license fee was due on the later of November 1, 2003
      or
      such later date when the cumulative total of all funds received from debt or
      equity issuances and revenue received from commercialization (income other
      than
      sales) and sales of phenoxodiol products exceeded $50,000,000. Following the
      PIPE capital raising on July 11, 2006, the funds received from equity issuances
      exceeded $50,000,000 which triggered this license fee payment. Future amounts
      payable to Novogen under terms of the license agreement are as
      follows:





1.
      Until
      the expiration of the exclusivity period of the license, MEPL must pay Novogen
      2.5% of all net sales and 25% of commercialization income. After the exclusivity
      period of the license, 1.5% of net sales must be paid to Novogen. The
      preconditions to such payments have not yet occurred.





12


The
      “Exclusivity Period” ends on the later of:





(a)  the
      date
      of expiration or lapsing of the last patent right in the patents and patent
      applications set out in the license agreement with Novogen; or





(b)  the
      date
      of expiration or lapsing of the last licensed patent right which MEPL would,
      but
      for the license granted in the license agreement, infringe in any country in
      the
      geographical territory covered by the license agreement by doing in that country
      any of the things set out in the license agreement.





2.
      In
      addition to the amounts above, beginning in 2006, an $8,000,000 annual milestone
      license fee is payable under the amended terms of the license agreement for
      each
      calendar year ending December 31 during the exclusivity period of the license.
      The December 31, 2006 license fee has been deferred under the license amendment
      deed which is discussed below.





**License
      Amendment Deed for Phenoxodiol**





In
      June
      2006, the Company entered into an amendment deed to the license agreement for
      phenoxodiol. Pursuant to the original term of the license agreement for
      phenoxodiol the Company was required to pay an $8,000,000 license milestone
      fee
      to Novogen Research Pty Limited in December 2006. The amendment deed extends
      the
      date that the $8,000,000 license milestone fee is payable until the earliest
      receipt by MEPL of the first :





(i)  approval
      by the FDA of a New Drug Application (NDA) for phenoxodiol;


(ii)  approval
      or authorization of any kind to market phenoxodiol in the United States; or


(iii)  approval
      or authorization of any kind by a government agency in any other country to
      market phenoxodiol.





Upon
      receipt of any of the above (the "Approval Date"), the Company must pay to
      Novogen, $8,000,000, together with interest on that amount from (and including)
      December 31, 2006, calculated at the bank bill rate.





As
      no
      approvals described above have been received no milestone license fees have
      been
      accrued at March 31, 2007 or June 30, 2006.





**Further
      Amended and Restated License Agreement**





Following
        agreement in March 2007 MEPL and Novogen Research Pty Limited entered into
        another amendment deed to the licence agreement for phenoxodiol for the purpose
        of further amending and restating the license agreement (the “Further Amended
        and Restated License Amendment”).
  The
        combined result of the Licence Amendment Deed for Phenoxodiol and the Further
        Amended and Restated License Agreement will be that upon the Approval Date,
        MEPL
        will be required to pay Novogen Research $8,000,000, together with interest
        on
        such amount from (and including) December 31, 2006 to (but excluding) the
        Approval Date. Thereafter, MEPL will be required to make license milestone
        fee
        payments of $8,000,000 to Novogen Research Pty Limited
  13
 on
        December 31 of the year of the Approval Date and on December 31 of each year
        thereafter during the exclusivity period under the License Agreement.








**License
      Agreement for NV-196 and NV-143**





In
      May
      2006, the Company entered into a second license agreement with Novogen for
      two
      oncology compounds, NV-196 and NV-143. NV-196 is being developed initially
      in
      oral form for pancreatic and bile duct cancer and is currently in Phase I human
      testing. NV-143 is targeted for the treatment of melanoma, also in oral dose
      form, and is in the pre-clinical testing stage. The license agreement is an
      agreement under which Novogen’s subsidiary, Novogen Research Pty Limited, grants
      to MEPL a worldwide non-transferable license under its patents and patent
      applications and in its know-how to conduct clinical trials and commercialize
      and distribute NV-196 and NV-143 products. The license agreement covers uses
      of
      NV-196 and NV-143 in the field of prevention, treatment or cure of cancer in
      humans delivered in all forms except topical applications. The license is
      exclusive until the expiration or lapsing of the last relevant Novogen patents
      or patent applications in the world and thereafter is non-exclusive. MEPL may
      terminate the agreement by giving three months’ notice to Novogen. MEPL paid
      $1,000,000 to Novogen in May 2006 which was the first lump sum license fee
      payment due under the terms of the license agreement. The Company is required
      to
      make payments under the terms of this second license agreement with Novogen
      as
      follows:





1.  A
      lump
      sum license fee of $1,000,000 is payable to Novogen on the commencement date
      of
      the license in consideration of the license granted. This initial lump sum
      license fee was paid to Novogen in May 2006.





2.  In
      further consideration of the license granted, MEPL must pay to Novogen the
      following milestone license fees upon the occurrence of the corresponding
      milestone as set forth below;





a)  the
      first
      license product containing NV-196 to reach a milestone as set forth below;
      and


b)  the
      first
      licensed product containing NV-143 to reach a milestone as set forth
      below.


The
      milestone license fees are:


i)  $1,000,000
      on the date an investigational new drug application (IND) for the licensed
      product goes into effect or the equivalent approval of a government agency
      is
      obtained in another country. If this event does not occur before March 31,
      2008
      then this amount will be due on this date;


ii)  $2,000,000
      on the date of enrollment of the first clinical trial subject in a Phase II
      clinical trial of the licensed product. If this event does not occur before
      June
      30, 2009, then this amount will be due on this date;


iii)  $3,000,000
      on the date of enrollment of the first clinical trial subject in a Phase III
      clinical trial of the licensed product. If this event does not occur before
      December 31, 2011, then this amount will be due on this date; and


iv)  $8,000,000
      on the date of first receipt of a NDA for the licensed product from the FDA
      or
      equivalent approval from a government agency in another country. If this event
      does not occur before December 31, 2013, then this amount will be due on this
      date.







14


3.  MEPL
      must
      pay Novogen royalties of 5.0% of all net sales and 25% of commercialization
      income for the term of the license. The royalty rate is reduced by 50% if the
      licensed patent rights in any country or territory expire, lapse, are revoked,
      do not exist or are assigned to MEPL and the product is entirely manufactured
      and supplied in such country.





4.  Minimum
      royalties of $3,000,000 per year are payable following the date of first receipt
      of an NDA for a licensed product from the FDA (or equivalent approval from
      a
      government agency in any other country) until the expiration of the
      term.





**License
      Option Deed**





The
      license option deed grants MEPL an exclusive right to accept and an exclusive
      right to match any proposed dealing by Novogen of its intellectual property
      rights with a third party relating to synthetic compounds (other than
      phenoxodiol) that have known or potential applications in the field of
      prevention, treatment or cure of cancer in humans in all forms other than
      topical applications.





**Services
      Agreement**





The
      Company does not currently intend to directly employ any staff. Under the terms
      of the services agreement, Novogen or its subsidiaries have agreed to provide
      services reasonably required by the Company relating to the development and
      commercialization of phenoxodiol and other licensed products, including NV-196
      and NV-143. Novogen has agreed to provide these services at cost plus a 10%
      mark-up. The Company may terminate the agreement on three months written notice
      to Novogen.





Transactions
      giving rise to expenditures amounting to $1,488,000 and $971,000 were made
      under
      the services agreement with Novogen during the nine months ended March 31,
      2007
      and 2006, respectively. Of these amounts, $886,000 and $441,000 related to
      service fees paid to Novogen for research and development services provided
      in
      the nine months ended March 31, 2007 and 2006, respectively, reflecting the
      time
      spent by Novogen research staff on the development of phenoxodiol, NV-196 and
      NV-143. Additionally, $602,000 and $530,000 of the total expenditures during
      the
      nine months ended March 31, 2007 and 2006, respectively, related to costs
      incurred for administration and accounting services provided by Novogen.





At March
      31,
      2007 and 2006, $168,000 and $114,000, respectively, were due and owing to
      Novogen under the services agreement and are included in amounts due to related
      company in the balance sheet.





**Manufacturing
      License and Supply Agreement**





Under
      the
      terms of the manufacturing license and supply agreement, MEPL has granted to one of Novogen’s
      subsidiaries an exclusive, non-transferable sub license to manufacture and
      supply phenoxodiol in its primary manufactured form. Novogen’s subsidiary has
      agreed to supply phenoxodiol to MEPL for the clinical trial development program
      and phenoxodiol’s ultimate commercial use. Phenoxodiol supplied by Novogen under
      the terms of this agreement will be charged at cost plus a 50%
      markup.





Transactions
      giving rise to expenditures amounting to $130,000 and $362,000 were made under




15


the
      manufacturing license and supply agreement with Novogen during the nine months
      ended March 31, 2007 and 2006, respectively.





At
      March
      31, 2007 and 2006 $21,000 and $76,000, respectively, were due and owing to
      Novogen under the manufacturing license and supply agreement and are included
      in
      amounts due to parent company.





Novogen
      has taken the strategic decision not to manufacture large scale Active
      Pharmaceutical Ingredients (API) for cancer drugs, including phenoxodiol, as
      these can be more economically supplied by third parties with particular
      expertise in this area. The contract facilities that have been identified are
      FDA licenced, have a track record of large scale API manufacture and have
      already invested in capital and equipment. The Company has completed the
      novation to MEPL of contracts that Novogen had entered into with third parties
      to develop a scalable manufacturing method to ensure that sufficient quantities
      of phenoxodiol can be manufactured in compliance with cGMP (Current Good
      Manufacturing Practices), to supply the necessary quantities of API for the
      OVATURE trial and to complete the analytical and stability work necessary for
      an
      NDA submission.








**6.
      Equity**





MEI is a
      development stage company incorporated in December 2000. MEI commenced
      operations in May 2002 coinciding with its listing on the London Stock
      Exchange’s Alternative Investment Market (AIM).





In
      May
      2002, the Company sold 2,523,000 shares of its common stock and 2,523,000
      warrants, raising proceeds of $9,022,000, net of $1,070,000 of transaction
      costs. The warrants were exercisable prior to November 30, 2003 at an exercise
      price of $4.00 per share. The common stock was listed for trading on the AIM.
      Following the listing, Novogen retained 95.1% of the Company’s common stock.





In
      June
      2003, 9,000 warrants were exercised, resulting in proceeds to the Company of
      $36,000. In November 2003, the remaining 2,514,000 warrants were exercised
      at an
      exercise price of $4.00 per share with proceeds to the Company of
      $10,056,000.





In
      December 2003, the Company sold 2,392,000 common stock units at a public
      offering price of $7.50 per unit. Each common stock unit consisted
      of:





·
            one
                share of common stock; and




·
            one
                warrant to purchase a share of common stock, exercisable prior to
                December
                18, 2006 at an exercise price equal to
                $9.00.




The
      2,392,000 warrants exercisable prior to December 18, 2006 have expired. No
      shares of common stock have been issued as a result of exercise of any of these
      warrants.





In
      connection with the December 2003 offering, the Company’s common stock and
      warrants commenced trading separately on the Nasdaq Global Market. The Company
      received proceeds of $15,522,000, net of $2,431,000 transaction costs in the
      December 2003 offering.




16


Following
      the offering, Novogen retained 86.9% of the Company’s common stock.





In
      January 2006, the Company voluntarily cancelled the trading of its common stock
      on the Alternative Investment Market of the London Stock Exchange (AIM).





On
      July
      11, 2006, the
      Company entered into a securities subscription agreement with certain accredited
      investors providing for the placement of 6,329,311 shares of the Company’s
      common stock and warrants exercisable for 2,215,258 shares of the Company’s
      common stock at a purchase price of $2.90 per unit. Each unit consisted of
      one
      share of common stock and 0.35 of a warrant to purchase one share of common
      stock. The warrants have an exercise price of $4.35 per share, subject to
      certain adjustments. The exercise price and number of shares issuable upon
      exercise of such warrants are subject to adjustment in the event of stock
      dividends, stock splits and other similar events. The warrants may be exercised
      no less than six months from the closing date and will expire four years from
      the date of issuance, or July 11, 2010. The Company closed the private placement
      on July 11, 2006. In connection with the private placement or PIPE, the Company
      received proceeds of $16.8 million net of $1.5 million commissions and other
      costs.





In
      connection with the securities subscription agreement described above the
      Company entered into a registration rights agreement pursuant to which the
      Company is obligated to file a resale registration statement with the SEC
      covering the shares of common stock issued in connection with the securities
      subscription agreement, in addition to the shares of common stock underlying
      the
      warrants issued in connection with the securities subscription agreement. The
      Company filed the registration statement on August 9, 2006. The resale
      registration statement was declared effective September 5, 2006.





On
      July
      11, 2006, the Company entered into a standby equity distribution agreement
      (the
“SEDA”), with Cornell Capital Partners, LP (“Cornell”). Under the SEDA, the
      Company may issue and sell to Cornell shares of its common stock for a total
      purchase price of up to $15 million, once a resale registration statement is
      in
      effect. Commencing as of the effective date of the registration statement and
      continuing for up to 24 months thereafter, the Company has sole discretion
      whether and when to sell shares of its common stock to Cornell. Cornell will
      be
      irrevocably bound to purchase shares of common stock from the Company after
      the
      Company sends a notice that it intends to sell shares of its common stock to
      Cornell. Each advance under the SEDA is limited to a maximum of $1.5
      million.





In
      connection with the SEDA, the Company paid Cornell a commitment fee of 123,626
      shares of its common stock and warrants to purchase 600,000 shares of its common
      stock which expire on July 11, 2010. The warrants have an exercise price of
      $4.35 per share, subject to certain adjustments. The exercise price and number
      of shares issuable upon exercise of such warrants are subject to adjustment
      in
      the event of stock dividends, stock splits and other similar events. The
      commitment fee, comprising shares and warrants, is a share-based payment and
      has
      been accounted for in accordance with FAS123R "Share-based Payment". The fair
      values of shares and warrants issued have been recognized directly as equity
      in
      the balance sheet and as selling, general and administration expenses in the
      income statement in the quarter ended September 30, 2006.





17


Before the
      Company can sell any shares of its common stock to Cornell under the SEDA,
      a
      resale registration statement must be filed with and declared effective by
      the
      SEC to cover Cornell’s resale of shares of the Company’s common stock that it
      buys under the SEDA.





The
      Company has not issued any shares of common stock under the terms of the
      SEDA.





Under
      the
      terms of the PIPE, the Company is required to maintain an effective registration
      statement covering the resale shares of common stock issued in the PIPE and
      the
      shares of common stock issueable upon exercise of the warrants issued in the
      PIPE. At the date of issuance the Company assessed the terms of the agreement,
      as the penalty for not maintaining the registration of common stock is less
      than
      the difference between the value of registered shares and unregistered shares,
      the equity has been classified as permanent equity.





On
      January 1, 2007 the Company adopted FASB Staff Position No. EITF 00-19-2 (FSP
      00-19-2). FSP 00-19-2 requires the contingent obligation to make future payments
      under the registration rights agreement be recognized separately in accordance
      with FASB Statement No. 5, Accounting for Contingencies and the underlying
      warrants be recognized without regard to the contingent obligation. The adoption
      of FSP 00-19-2 had no effect on the Company’s financial statements as the
      warrants will remain classified as permanent equity and management does not
      currently believe that it is probable a payment will be made under the
      registration rights agreement





Following
      the private
      placement, Novogen retained 78.1% of the Company’s common stock.








**7.
      Contingent Liability**





In
      the
      event that the registration statement ,
      filed
      in connection with the PIPE, ceases to be effective or usable at any time while
      shares of common stock covered by it remain unsold or may only be sold subject
      to certain volume limitations, or investors are not permitted to utilize the
      prospectus in connection with the registration statement to resell shares of
      common stock covered by the registration statement, the Company will be
      obligated to pay investors who purchased shares of common stock in the private
      placement liquidated damages equal to 1% of the aggregate purchase price paid
      by
      each investor pursuant to the securities subscription agreement for any shares
      of common stock, shares of common stock issuable upon exercise of warrants
      or
      warrants then held by each investor per month (pro rated for any period less
      than a month) until the registration statement is effective or the investors
      are
      permitted to utilize the prospectus in connection with the registration
      statement to resell shares of common stock covered by the registration
      statement.





Liquidated
      damages paid to each investor in the private placement may not exceed more
      than
      10% of the purchase price paid by such investor for shares of common stock,
      shares of common stock issuable upon exercise of warrants or warrants purchased
      under the securities subscription agreement. The maximum amount of liquidated
      damages payable would be approximately $1.8 million. If the Company becomes
      obligated to pay liquidated damages, the Company would reduce its limited
      working capital and potentially need to raise additional funds.


18


Item
      2:  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation





**Special
      Note Regarding Forward-Looking Statements**




This
      quarterly report on Form
      10-Q includes forward-looking statements within the meaning of Section 27A
      of
      the Securities Act of 1933, as amended and Section 21E of the Security Exchange
      Act of 1934, as amended. All statements other than statements of historical
      facts contained in this quarterly report, including statements regarding the
      future financial position, business strategy and plans and objectives of
      management for future operations, are forward-looking statements. The words
      “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,”
“should,” “plan,” “expect,” and similar expressions, as they relate to the
      Company, are intended to identify forward-looking statements. We have based
      these forward-looking statements largely on current expectations and projections
      about future events and financial trends that we believe may affect our
      financial condition, results of operations, business strategy and financial
      needs. These forward-looking statements are subject to a number of risks,
      uncertainties and assumptions, including, among other things:





·our
                limited operating history;·our
                inability to obtain any additional required financing or financing
                available to us on acceptable terms;·our
                failure to successfully commercialize our product
                candidates;·costs
                and delays in the development and/or receipt of FDA or other required
                governmental approvals, or the failure to obtain such
              approvals,for
                our product candidates;·uncertainties
                in clinical trial results;·our
                inability to maintain or enter into, and the risks resulting from
                our
                dependence upon, collaboration or contractual arrangements
              necessaryforthe
                development, manufacture,commercialization,
                marketing, sales and distribution of any products;·our
                inability to control the costs of manufacturing our
                products;·continued
                cooperation and support of Novogen Limited (“Novogen”), our parent
                company;·competition
                and competitive factors;·our
                inability to protect our patents or proprietary rights and obtain
                necessary rights to third party patents and intellectual property
                to
              operateour
                business;·our
                inability to operate our business without infringing the patents
                and
                proprietary rights of others;·costs
                stemming from our defence against third party intellectual property
                infringement claims;·difficulties
                in enforcement of civil liabilities against those of our officers
                and
                directors who are residents of jurisdictions outside
              the
                United States;·general
                economic conditions;·the
                failure of any products to gain market acceptance;·technological
                changes;·government
                regulation generally and the receipt of the regulatory
                approvals;·changes
                in industry practice; and·one-time
                events.





19


These
      risks are not exhaustive. Other sections of this quarterly report may include
      additional factors which could adversely impact business and financial
      performance. In addition, our business and financial performance may be affected
      by the factors that are discussed under “Risk Factors” in the Annual Report on
      Form 10-K for the year ended June 30, 2006 and quarterly reports on Form 10-Q
      for the periods ended September 30 and December 31, 2006. Moreover, we operate
      in a very competitive and rapidly changing environment.




You
      should not rely upon forward-looking statements as predictions of future events.
      We cannot assure you that the events and circumstances reflected in the
      forward-looking statements will be achieved or will occur. Although we believe
      that the expectations reflected in the forward-looking statements are
      reasonable, we cannot guarantee future results, levels of activity, performance
      or achievements.




The
      following discussion is qualified in its entirety by, and should be read in
      conjunction with, the more detailed information set forth in the financial
      statements and the notes thereto appearing elsewhere in this
      report.




**Overview**





We
      are a
      development stage pharmaceutical company listed on the Nasdaq Global Market
      under the symbol “MSHL”. We were incorporated on December 1, 2000 as a
      wholly-owned subsidiary of Novogen Limited, an Australian company. We commenced
      operations in May 2002 and our business purpose is the development and
      commercialization of drugs for the treatment of cancer.





We
      are
      presently engaged in the clinical development and commercialization of a drug
      candidate called phenoxodiol. We believe that phenoxodiol may have broad
      application against a wide range of cancers. Phenoxodiol appears to target
      a
      number of key components involved in cancer cell survival and proliferation
      based on the emerging field of signal transduction regulation, with little
      or no
      effect on normal cells detected in pre-clinical testing. We have also licensed
      two other anti-cancer compounds, NV-196 and NV-143, from a subsidiary of
      Novogen.





Our
      strategy is to undertake further clinical development and testing of
      phenoxodiol, focusing on those therapeutic indications that will expedite drug
      marketing approval by regulatory bodies, leading to phenoxodiol’s
      commercialization and wide scale distribution. We also plan




20


to
      develop NV-196 and NV-143 for therapeutic indications not currently targeted
      by
      phenoxodiol.




We
      do not
      employ any staff directly but obtain services from Novogen under a services
      agreement. We have incurred losses since inception and expect to incur operating
      losses and generate negative cash flows from operations for the foreseeable
      future as we expand research and development activities and move phenoxodiol
      into later stages of development. As of March 31, 2007, we had accumulated
      losses of $37,279,000.





We
      have
      not generated any revenues from operations since inception other than interest
      on cash assets.





Expenses
      have consisted primarily of costs associated with conducting the clinical trials
      of phenoxodiol, costs incurred under the license agreement for phenoxodiol,
      costs incurred under the license agreement for NV-196 and NV-143, the services
      agreement and the manufacturing license and supply agreements with Novogen
      and
      its subsidiaries, including the costs of the clinical trial drug
      supplies.





To
      date,
      operations have been funded primarily through the sale of equity
      securities.





We
      expect
      that quarterly and annual operating results will fluctuate for the foreseeable
      future due to several factors including the timing and extent of research and
      development efforts and the outcome and extent of clinical trial activities.
      Our
      limited operating history makes accurate prediction of future operating results
      difficult or impossible.





**Critical
      Accounting Estimates**





The
      preparation of the consolidated financial statements in conformity with
      accounting principles generally accepted in the United States requires
      management to make estimates and assumptions that affect the amounts reported
      in
      the financial statements and the accompanying notes. Actual results could differ
      from those estimates.





*Development
      Expenses*




Research
      and development costs incurred since inception through March 31, 2007 aggregate
      to $14,359,000.





Research
      and development costs include clinical trial expenses and are expensed as they
      are incurred. These costs are expected to increase in the future as the
      phenoxodiol clinical program progresses and as we expand our research and
      development of NV-196 and NV-143. The planned phenoxodiol Phase III OVATURE
      trial will require large patient numbers resulting in significantly increased
      costs.





Historical
      research and development costs and clinical trial costs have not been documented
      on a project by project basis. In addition, research and development resources
      are supplied by Novogen across several projects. As a result, the costs incurred
      for each clinical project cannot be stated precisely on a project by project
      basis.





We
      expect
      that a large percentage of research and development expenses in the future
      will
      be




21


incurred
      in support of current and future clinical development programs. These
      expenditures are subject to a number of uncertainties in timing and cost to
      completion.





The
      duration and cost of clinical trials may vary significantly over the life of
      a
      project as a result of:


•the
                number of sites included in the trials;•the
                length of time required to enroll suitable patients;•the
                number of patients that participate in the trials;•the
                indication being studied; and•the
                efficacy and safety profile of the
                product.





Our
      strategy also includes the option of entering into collaborative arrangements
      with third parties to participate in the development and commercialization
      of
      our drug candidates. In the event third parties have control over the clinical
      development process, the completion date would largely be under the control
      of
      that third party.





As
      a
      result of these uncertainties, we are unable to determine the duration of or
      completion costs for research and development projects or when and to what
      extent we will receive cash inflows from the commercialization and sale of
      the
      drug candidates.





We
      intend
      to continue the clinical development of phenoxodiol as well as NV-196 and
      NV-143, which were licensed from Novogen. We will also continue to assess the
      opportunity to license other cancer drugs developed by Novogen as the
      opportunities arise.





*Clinical
      Trial Expenses*





Estimates
      have been used in determining the expense liability under certain clinical
      trial
      contracts where services have been performed but not yet invoiced. The actual
      costs of those services could differ in amount and timing from the estimates
      used in completing the financial results.





Clinical
      trial expenses of $466,000 have been accrued at March 31, 2007. These estimates
      are based on the number of patients in each trial and the number of drug
      administration cycles completed.





Clinical
      research contracts may vary depending on the clinical trial design and protocol.
      Generally the costs, and therefore estimates, associated with clinical trial
      contracts are based on the number of patients, drug administration cycles,
      the
      type of treatment and the outcome being measured. The length of time before
      actual amounts can be determined will vary depending on length of the patient
      cycles and the timing of the invoices by the clinical trial
      partners.





*Manufacturing
      Scale-up Expenses*





Estimates
      have been used in determining the expense liability under certain manufacturing




22


scale-up
      contracts where services have been performed but not yet invoiced. The actual
      costs of those services could differ in amount and timing from the estimates
      used in completing the financial results.





The
      manufacturing process development of phenoxodiol is being undertaken to develop
      a scalable manufacturing process which will facilitate larger scale production
      quantities while concurrently developing analytical methods and the
      documentation required for the future New Drug Application (NDA). An NDA is
      needed in order to market phenoxodiol and will be required if the OVATURE study
      is successful. The work being undertaken will also provide the drug quantities
      needed for the OVATURE clinical trial.





Manufacturing
      expenses of $834,000 have been accrued at March 31, 2007. These estimates are
      based on the milestones completed for each of the service
      contracts.





*Stock
      Based Compensation*





We
      account for stock based payments in accordance with SFAS No. 123R “Share-Based
      Payments”. The costs of these equity-settled transactions are determined using a
      binomial model to calculate the fair value at the date on which they are
      granted. With respect to the fair value of 600,000 warrants issued July 11,
      2006, in connection with the SEDA commitment fee, the following assumptions
      were
      used:




Dividend
                yield
            0%Expected
                volatility
            76%Historical
                volatility
            76%Risk-free
                interest rate
            5.45%Expected
                life
                of warrant
            4
                yearsWarrant
                fair value
            $1.998





The
      dividend yield reflects the assumption that the current dividend payout, which
      is zero, will continue with no anticipated increases. The expected life of
      the
      option is based on historical data and is not necessarily indicative of exercise
      patterns that may occur. The expected volatility reflects the assumption that
      the historical volatility is indicative of future trends, which may also not
      necessarily be the actual outcome.





The
      Company’s stock option plan provides for the grant of options to the
      Company’s directors, employees, employees of the Company’s affiliates and
      certain of the Company’s contractors and consultants. To date, no options have
      been issued under the plan.




23


**Results
      of Operations**





**Three
      Months Ended March 31, 2007 and 2006**





We
      recorded a consolidated loss of $1,723,000 and $3,252,000 for the three months
      ended March 31, 2007 and 2006, respectively.





**Revenues:** We
      received interest on cash assets and cash equivalents and short term investments
      of $171,000 for the three months ended March 31, 2007 versus $101,000 for the
      three months ended March 31, 2006. The increase was due to higher cash balances
      following the capital raising in July 2006 combined with an increase in interest
      rates earned by our cash deposits.





**Research
      and Development:** Research
      and development expenses increased $413,000 to $1,446,000 for the three months
      ended March 31, 2007 compared to $1,033,000 for the three months ended March
      31,
      2006. The increase was due to a number of factors, including the costs
      associated with the Phase III OVATURE clinical trial. Costs were also incurred
      in connection with the production scale-up activities of phenoxodiol and the
      manufacture of clinical trial drug supply. A further contributing factor to
      the
      increase in the research and development expenses for the three months ended
      March 31, 2007 compared to corresponding period in 2006 was an increase in
      the
      research and development service fees incurred under the services agreement
      with
      Novogen as a result of the additional time spent on the OVATURE clinical trial
      and in developing the recently licensed product candidates NV-196 and NV-143.
      We
      expect research and development clinical trial expenses to increase
      significantly in the future due to the Phase III OVATURE study.





**License
      Fees:** No
      milestone license fees have been expensed in the three months ended March 31,
      2007. Pursuant to the Further Amended and Restated Licence Agreement, the annual
      $8,000,000 milestone payment, due to Novogen on each December 31 during the
      exclusivity period, will not become payable until receipt of an NDA for
      phenoxodiol or other approval to market phenoxodiol in the U.S. or abroad has
      been obtained. Milestone license fees of $2,000,000 were expensed in the three
      months ended March 31, 2006 in connection with the annual milestone license
      fee
      of $8,000,000 due to Novogen on December 31, 2006.





**Selling,
      General and Administrative:** Selling,
      general and administrative expenses increased by $127,000 to $447,000 for the
      three months ended March 31, 2007 compared to $320,000 for the three months
      ended March 31, 2006. The increase in expenses was due to investor and public
      relation costs, increased travel costs and additional director fees.





Foreign
      exchange gains/(losses) are included in selling, general and administrative
      expenses and occur when revaluing cash denominated in foreign currencies and
      upon consolidation of our wholly owned subsidiary Marshall Edwards Pty Ltd
      (MEPL). MEPL uses U.S. dollars as its functional currency and also engages
      in
      transactions in foreign currencies. Further, MEPL’s accounts and financial
      statements are denominated in Australian dollars. Translation of MEPL’s
      financial statements into U.S. dollars did not have a material impact on our
      financial position. At March 31, 2007, we had not established a foreign currency
      hedging program. Net foreign exchange losses during the three months ended
      March
      31, 2007 were $14,000 compared with net foreign exchange losses of $12,000
      during the three months ended March 31, 2006.








24


**Nine
      Months Ended March 31, 2007 and 2006**





We
      recorded a consolidated loss of $11,778,000 and $6,833,000 for the nine months
      ended March 31, 2007 and 2006, respectively.





**Revenues:** We
      received interest on cash assets and cash equivalents and short term investments
      of $489,000 for the nine months ended March 31, 2007 versus $353,000 for the
      nine months ended March 31, 2006. The increase was due to higher cash balances
      following the capital raising in July 2006 combined with an increase in interest
      rates earned by our cash deposits.





**Research
      and Development:** Research
      and development expenses increased $2,091,000 to $4,179,000 for the nine months
      ended March 31, 2007 compared to $2,088,000 for the nine months ended March
      31,
      2006. The increase was due to a number of factors including the initial fee
      following the appointment of the clinical research organization which has
      commenced preparations for enrollment of patients into the Phase III OVATURE
      clinical trial. Costs were also incurred in connection with the production
      scale-up activities of phenoxodiol and the development of the NDA documentation.
      A further contributing factor to the increase in the research and development
      expenses for the nine months ended March 31, 2007 compared to corresponding
      period in 2006 was an increase in the research and development service fees
      incurred under the services agreement with Novogen as a result of the additional
      time spent on OVATURE clinical trial and in developing the recently licensed
      product candidates NV-196 and NV-143. We expect research and development
      clinical trial expenses to increase significantly in the future due to the
      Phase
      III OVATURE study.





**License
      Fees:** The
      second lump sum licence fee of $5,000,000 due under the terms of the licence
      agreement has been expensed in the nine months ended March 31, 2007. This second
      lump sum license fee was due on the later of November 1, 2003 or such later
      date
      when the cumulative total of all funds received from debt or equity issuances
      and revenue received from commercialization (income other than sales) and sales
      of phenoxodiol products exceeds $50,000,000. Following the PIPE capital raising
      on July 11, 2006 the funds received from equity issuances exceeded $50,000,000
      which triggered this license fee payment. Milestone license fees of $4,000,000
      were expensed in the nine months ended March 31, 2006. Of this milestone license
      fee expense, $2,000,000 was in connection with the December 31, 2006 annual
      milestone license fee of $8,000,000. The balance of the milestone license fee
      expense of $2,000,000 was in connection with the annual milestone fee of
      $4,000,000 that was paid to Novogen in January, 2006. Pursuant to the licence
      agreement amendment deed entered into in June 2006, the $8,000,000 annual
      milestone licence fee, due on December 31, 2006, was postponed until the receipt
      of an NDA in the U.S. or marketing approval for phenoxodiol is
      obtained.





**Selling,
      General and Administrative:** Selling,
      general and administrative expenses increased by $1,989,000 to $3,087,000 for
      the nine months ended March 31, 2007 compared to $1,098,000 for the nine months
      ended March 31, 2006. The increase was due primarily to the cost of the
      share-based payment of the SEDA commitment fee paid to Cornell Capital Partners
      (“Cornell”) in the form of shares and warrants which were valued at $1,642,000
      and general corporate expenses including an increase in legal compliance costs,
      travel and service




25


fees
      paid
      to Novogen reflecting an increase in corporate and accounting services and
      insurance.





Foreign
      exchange gains/(losses) are included in selling, general and administrative
      expenses and occur when revaluing cash denominated in foreign currencies and
      upon consolidation of MEPL. MEPL uses U.S. dollars as its functional currency
      and also engages in transactions in foreign currencies. Further, MEPL’s accounts
      and financial statements are denominated in Australian dollars. Translation
      of
      MEPL’s financial statements into U.S. dollars did not have a material impact on
      our financial position. Net foreign exchange losses during the nine months
      ended
      March 31, 2007 were $39,000 compared with net foreign exchange losses of $31,000
      during the nine months ended March 31, 2006.





**Liquidity
      and Capital Resources**





At
      March
      31, 2007, we had cash resources of $18,271,000 compared to $10,054,000 at June
      30, 2006. The increase was due to the capital raising in July 2006, as described
      below, which was partially offset by the payment of the $5,000,000 second lump
      sum license fee and expenditures in the clinical trial program and other
      corporate expenses incurred in the period. Funds are invested in short term
      market accounts, pending use.





On
      July
      11, 2006, we entered into a securities subscription
      agreement with certain accredited investors providing for the placement of
      6,329,311 shares of the Company’s common stock and warrants exercisable for
      2,215,258 shares of the Company’s common stock at a purchase price of $2.90 per
      unit. Each unit consisted of one share of common stock and 0.35 of a warrant
      to
      purchase one share of common stock. The warrants have an exercise price of
      $4.35
      per share, subject to certain adjustments in the event of stock dividends,
      stock
      splits and other similar events. The warrants may be exercised no less than
      six
      months from the closing date and will expire four years from the date of
      issuance, or July 11, 2010. We closed the private placement on July 11, 2006.
      The Company received proceeds of $16.8 million net of $1.5 million commissions
      and other costs.





On
      July
      11, 2006, we entered into a standby equity distribution agreement, which we
      refer to as the SEDA, with Cornell. Under the SEDA, we may issue and sell to
      Cornell shares of our common stock for a total purchase price of up to $15
      million, once a resale registration statement is in effect. We have sole
      discretion whether and when to sell shares of our common stock to Cornell.
      Cornell will be irrevocably bound to purchase shares of our common stock from
      us
      after we send a notice that we intend to sell shares of our common stock to
      Cornell. Each advance under the SEDA is limited to a maximum of $1.5
      million.





In
      connection with the SEDA, we paid Cornell a commitment fee of 123,626 shares
      of
      our common stock and warrants to purchase 600,000 shares of our common stock
      which expire on July 11, 2010. The warrants have an exercise price of $4.35
      per
      share, subject to certain adjustments.








While
      the
      SEDA provides us access to significant equity financing, using the SEDA at
      low
      market prices could result in a
      dilution of net tangible assets per share to current shareholders, and also
      may
      have a depressing effect on our stock price.





26


**Source
      and Uses of Cash**




*Cash
      Used in Operating Activities*





Cash
      used
      in operating activities for the nine months ended March 31, 2007 was $8,698,000
      compared to $6,375,000 for the same period in 2006. The increase in cash outflow
      of $2,323,000 for the nine months ended March 31, 2007 was due primarily to
      the
      second lump sum license fee paid to Novogen of $5,000,000 during the period
      compared to $4,000,000 paid in the corresponding period. Additional cash outflow
      was also incurred in connection with the increased costs associated with the
      Phase III OVATURE trial and the scale-up costs of phenoxodiol.





*Cash
      Requirements*





We
      have
      commenced a pivotal clinical study to support marketing approval of phenoxodiol
      for ovarian cancer. The trial, known as the OVATURE study, is designed to
      establish the safety and effectiveness of phenoxodiol in combination with
      carboplatin for late-stage ovarian cancers. We expect to have significant cash
      requirements in connection with the OVATURE study.





Additional
      cash resources will also be required to continue the clinical trial programs
      for
      NV-196 and NV-143 which were licensed from Novogen in May 2006.





Ongoing
      operations through the conduct of the clinical trial program will continue
      to
      consume cash resources without generating revenues.




We
      believe that the proceeds of the private placement closed in July 2006, as
      well
      as our access to the SEDA, provide us with sufficient cash resources to fund
      our
      planned operations over the next twelve months, which include costs expected
      to
      be incurred in the OVATURE trial, the planned preclinical development of NV-196
      and NV-143 and the planned human Phase I clinical program for
      NV-196.





We
      will
      however need to raise additional funds in the future in order to further the
      clinical development program for NV-196 and NV-143 beyond the current
      objectives.





**License
      Agreement for Phenoxodiol**





In
      September 2003, we entered into a license agreement pursuant to which Novogen’s
      subsidiary, Novogen Research Pty Limited, granted to MEPL a worldwide
      non-transferable license under its patents and patent applications and in its
      know-how to conduct clinical trials and commercialize and distribute phenoxodiol
      products. The license agreement covers uses of phenoxodiol in the field of
      prevention, treatment or cure of cancer in humans delivered in all forms except
      topical applications. The license is exclusive until the expiration or lapsing
      of the last relevant Novogen patents or patent applications in the world and
      thereafter is non-exclusive. MEPL may terminate the agreement by giving three
      months’ notice to Novogen. MEPL paid $5,000,000 to Novogen in February 2004
      which was the first lump sum license fee payment due under the terms of the
      license agreement. Also, MEPL paid $2,000,000 to Novogen in January 2005 and
      $4,000,000 in January 2006 which were the annual milestone license fee payments
      due under the license agreement. We paid a second lump sum license fee




27


of
      $5,000,000 to Novogen in July 2006 following the raising of funds in a private
      placement. This license fee was due on the later of November 1, 2003 or such
      later date when the cumulative total of all funds received from debt or equity
      issuances and revenue received from commercialization (income other than sales)
      and sales of phenoxodiol products exceeds $50,000,000. Following the PIPE
      capital raising on July 11, 2006, the funds received from equity issuances
      exceeded $50,000,000 which triggered this license fee payment. Future amounts
      payable to Novogen under terms of the license agreement are as
      follows:





1.
      Until
      the expiration of the exclusivity period of the license, MEPL must pay Novogen
      2.5% of all net sales and 25% of commercialization income. After the exclusivity
      period of the license, 1.5% of net sales must be paid to Novogen. The
      preconditions to such payments have not yet occurred.





The
      “Exclusivity Period” ends on the later of:





(a)  the
      date
      of expiration or lapsing of the last patent right in the patents and patent
      applications set out in the license agreement with Novogen; or





(b)  the
      date
      of expiration or lapsing of the last licensed patent right which MEPL would,
      but
      for the license granted in the license agreement, infringe in any country in
      the
      geographical territory covered by the license agreement by doing in that country
      any of the things set out in the license agreement.





2.
      In
      addition to the amounts above, beginning in 2006, an $8,000,000 annual milestone
      license fee is payable under the amended terms of the license agreement for
      each
      calendar year ending December 31 during the exclusivity period of the license.
      The December 31, 2006 license fee has been deferred under the license amendment
      deed which is discussed below.





**License
      Amendment Deed for Phenoxodiol**





In
      June
      2006, we entered into an amendment deed to the license agreement for
      phenoxodiol. Pursuant to the original term of the license agreement for
      phenoxodiol we were required to pay an $8,000,000 license milestone fee to
      Novogen Research Pty Limited in December 2006. The amendment deed extends the
      date that the $8,000,000 license milestone fee is payable until the earliest
      receipt by MEPL of the first :





(i)  approval
      by the FDA of a NDA for phenoxodiol;


(ii)  approval
      or authorization of any kind to market phenoxodiol in the United States; or


(iii)  approval
      or authorization of any kind by a government agency in any other country to
      market phenoxodiol.





Upon
      receipt of any of the above (the "Approval Date"), we must pay to Novogen,
      $8,000,000, together with interest on that amount from (and including) December
      31, 2006, calculated at the bank bill rate.





As
      no
      approvals described above have been received no milestone license fees have
      been
      accrued at March 31, 2007.





28


**Further
      Amended and Restated License Agreement**





Following
        agreement in March 2007 MEPL and Novogen Research Pty Limited entered into
        another amendment deed to the licence agreement for phenoxodiol for the purpose
        of further amending and restating the license agreement (the “Further Amended
        and Restated License Amendment”).
  The
        combined result of the Licence Amendment Deed for Phenoxodiol and the Further
        Amended and Restated License Agreement will be that upon the Approval Date,
        MEPL
        will be required to pay Novogen Research $8,000,000, together with interest
        on
        such amount from (and including) December 31, 2006 to (but excluding) the
        Approval Date. Thereafter, MEPL will be required to make license milestone
        fee
        payments of $8,000,000 to Novogen Research Pty Limited on December 31 of
        the
        year of the Approval Date and on December 31 of each year thereafter during
        the
        exclusivity period under the License Agreement.





**License
      Agreement for NV-196 and NV-143**





In
      May
      2006, we entered into a second license agreement with Novogen for two oncology
      compounds, NV-196 and NV-143. NV-196 is being developed initially in oral form
      for pancreatic and bile duct cancer and is currently in Phase I human testing.
      NV-143 is targeted for the treatment of melanoma, also in oral dose form, and
      is
      in the pre-clinical testing stage. The license agreement is an agreement under
      which Novogen’s subsidiary, Novogen Research Pty Limited, grants to MEPL a
      worldwide non-transferable license under its patents and patent applications
      and
      in its know-how to conduct clinical trials and commercialize and distribute
      NV-196 and NV-143 products. The license agreement covers uses of NV-196 and
      NV-143 in the field of prevention, treatment or cure of cancer in humans
      delivered in all forms except topical applications. The license is exclusive
      until the expiration or lapsing of the last relevant Novogen patents or patent
      applications in the world and thereafter is non-exclusive. MEPL may terminate
      the agreement by giving three months’ notice to Novogen. MEPL paid $1,000,000 to
      Novogen in May 2006 which was the first lump sum license fee payment due under
      the terms of the license agreement. We are required to make payments under
      the
      terms of this second license agreement with Novogen as follows:





1.  A
      lump
      sum license fee of $1,000,000 is payable to Novogen on the commencement date
      of
      the license in consideration of the license granted. This initial lump sum
      license fee was paid to Novogen in May 2006.





2.  MEPL
      must
      pay to Novogen the following milestone license fees upon the occurrence of
      the
      corresponding milestone as set forth below:





a)  the
      first
      licensed product containing NV-196 to reach a milestone as set forth below;
      and


b)  the
      first
      licensed product containing NV-143 to reach a milestone as set forth
      below.


The
      milestone license fees are:


i)
            $1,000,000
                on the date an IND for the licensed product goes into effect or the
                equivalent approval of a government agency is obtained in another
                country.
                If this event does not occur before March 31, 2008, then this amount
                will
                be due on this date;


29


ii)
            $2,000,000
                on the date of enrollment of the first clinical trial subject in
                a Phase
                II clinical trial of the licensed product. If this event does not
                occur
                before June 30, 2009, then this amount will be due on this
                date;


iii)
            $3,000,000
                on the date of enrollment of the first clinical trial subject in
                a Phase
                III clinical trial of the licensed product. If this event does not
                occur
                before December 31, 2011 then this amount will be due on this date;
                and


iv)
            $8,000,000
                on the date of first receipt of a NDA for the licensed product from
                the
                FDA or equivalent approval from a government agency in another country.
                If
                this event does not occur before December 31, 2013, then this amount
                will
                be due on this date.





3.  MEPL
      must
      pay Novogen royalties of 5.0% of all net sales and 25% of commercialization
      income for the term of the license. The royalty rate is reduced by 50% if the
      licensed patent rights in any country or territory expire, lapse, are revoked,
      does not exist or is assigned to MEPL and the product is entirely manufactured
      and supplied in such country.





4.  Minimum
      royalties of $3,000,000 per year are payable following the date of first receipt
      of an NDA for a licensed product from the FDA (or equivalent approval from
      a
      government agency in any other country) until the expiration of the
      term.





We
      will
      also be required to make payments to Novogen under the services agreement and
      manufacturing license and supply agreement.





We
      do not
      intend to incur any significant capital expenditures in the foreseeable
      future.





We
      are
      currently assessing the future cash requirements needed to fund new clinical
      trial initiatives and licensing options available under the license option
      deed.








*Off-Balance
      Sheet Arrangements*





We
      do not
      currently have any off-balance sheet arrangements.





*Contractual
      Obligations*





The
      following table summarizes our contractual obligations at March 31,
      2007:








(In
                thousands)
            
            
            
            Payment
                due by period**Contractual
                Obligations**
            
            **Total**
            
            less
                than 1
              Year
            
            1
                -
                3
              Years
            
            3
                -
                5
              Years
            
            More
                than
              5
                YearsPurchase
                Obligations
            
            $
            9,466
            
            $
            6,108
            
            $
            3,023
            
            $
            335
            
            $
            -Total
            
            $
            9,466
            
            $
            6,108
            
            $
            3,023
            
            $
            335
            
            $
            -




No
      amounts have been included for future payments to Novogen which may arise in
      connection with the license agreements for phenoxodiol, NV-196 and NV-143,
      the
      services agreement or the manufacturing license and supply agreement as future
      payments under the terms of the agreements are subject to termination
      provisions.








30


Item
      3:  Quantitative
      and Qualitative Disclosures about Market Risk







**Interest
      Rate Risk**





We place
      cash in “on call” deposits and short term investments with high quality
      financial institutions.





We
      do not
      consider the effects of interest rate movements to be a material risk to our
      financial condition. We do not use derivative financial instruments to hedge
      our
      risks associated with the fluctuations of interest rates.





**Foreign
      Currency Risk**





We conduct
      a portion of our business in various currencies, primarily in U.S. and
      Australian dollars. At March 31, 2007, we had not established a foreign currency
      hedging program. Net foreign exchange losses during the nine months ended March
      31, 2007 were $39,000 compared with net foreign exchange losses of $31,000
      during the nine months ended March 31, 2006. Foreign exchange gains and losses
      occur upon consolidation of MEPL, which uses U.S. dollars as its functional
      currency and also engages in transactions in foreign currencies. MEPL’s accounts
      are denominated in Australian dollars. Translation of MEPL’s financial
      statements into U.S. dollars did not have a material impact on our financial
      position .





We
      do not
      consider the effects of foreign currency movements to be a material risk to
      our
      financial condition.














31


Item
      4:  Controls
      and Procedures




**Evaluation
      of Disclosure Controls and Procedures**





At
      the
      end of the period covered by this report, our management, with the participation
      of our principal executive officer and principal financial officer, evaluated
      the effectiveness of our disclosure controls and procedures (as defined in
      Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended).
      Based on this evaluation, our principal executive officer and principal
      financial officer have concluded that our disclosure controls and procedures
      are
      effective to ensure that information required to be disclosed by us in reports
      that we file or submit under the Securities Exchange Act of 1934, as amended
      is
      recorded, processed, summarized and reported within the time periods specified
      in Securities and Exchange Commission rules and forms.




There
      were no changes in our internal control over financial reporting during the
      period covered by this Form 10-Q that have materially affected, or are
      reasonably likely to affect, the Company’s internal control over financial
      reporting.


32








**PART
      II OTHER INFORMATION**








Item
      6:  Exhibits
      and Reports on Form 8-K








a)
      Exhibits


**Exhibit
      Index**








Exhibits





31.1
            Certification
                required by Rule 13a-14(a) or Rule 15d-14(a)31.2
            Certification
                required by Rule 13a-14(a) or Rule 15d-14(a)32
            Certification
                required by Rule 13a-14(b) or Rule 15d-14(b) and section 1350 of
                Chapter
                63 of Title 18 of the United States Code (18 U.S.C
                1350).



















33





**SIGNATURES**











Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this Report to be signed on its behalf by the undersigned, thereunto
      duly authorized.








MARSHALL
      EDWARDS, INC.








/s/
      DAVID
      SEATON





David
      R.
      Seaton


Chief
      Financial Offer


(Duly
      Authorized Officer and Principal Financial Officer)





Date:
      May
      8, 2007


34





Exhibit
      31.1


**CERTIFICATION**





I,
      Christopher Naughton, certify that:







1.
            I
                have reviewed this report on Form 10-Q of Marshall Edwards,
                Inc.;




2.
            Based
                on my knowledge, this report does not contain any untrue statement
                of a
                material fact or omit to state a material fact necessary to make
                the
                statements made, in light of the circumstances under which such statements
                were made, not misleading with respect to the period covered by this
                report;




3.
            Based
                on my knowledge, the financial statements, and other financial information
                included in this report, fairly present in all material respects
                the
                financial condition, results of operations and cash flows of the
                registrant as of, and for, the periods presented in this
                report;




4.
            The
                registrant’s other certifying officer(s) and I are responsible for
                establishing and maintaining disclosure controls and procedures (as
                defined in Exchange Act Rules 13a-15(e) and 15d-15(e) ) for the registrant
                and have:




(a)
            Designed
                such disclosure controls and procedures, or caused such disclosure
                controls and procedures to be designed under our supervision, to
                ensure
                that material information relating to the registrant, including its
                consolidated subsidiaries, is made known to us by others within those
                entities, particularly during the period in which this report is
                being
                prepared:




(b)
            Evaluated
                the effectiveness of the registrant’s disclosure controls and procedures
                and presented in this report our conclusions about the effectiveness
                of
                the disclosure controls and procedures, as of the end of the period
                covered by this report based on such evaluation;
                and




(c)
            Disclosed
                in this report any change in the registrant’s internal control over
                financial reporting that occurred during the registrant’s most recent
                fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
                annual report) that has materially affected, or is reasonably likely
                to
                materially affect, the registrant’s internal control over financial
                reporting; and




5.
            The
                registrant’s other certifying officer(s) and I have disclosed, based on
                our most recent evaluation of internal control over financial reporting,
                to the registrant’s auditors and the audit committee of the registrant’s
                board of directors:




(a)
            All
                significant deficiencies and material weaknesses in the design or
                operation of internal control over financial reporting which are
                reasonably likely to adversely affect the registrant’s ability to record,
                process, summarize and report financial information;
                and




(b)
            Any
                fraud, whether or not material, that involves management or other
                employees who have a significant role in the registrant’s internal control
                over financial reporting.










Date:
          May
          8, 2007
 /s/CHRISTOPHER
          NAUGHTON
  Christopher
          Naughton
 Chief
          Executive Officer


35





Exhibit
      31.2


**CERTIFICATION**





I,
      David
      Ross Seaton, certify that:







1.
            I
                have reviewed this report on Form 10-Q of Marshall Edwards,
                Inc.;




2.
            Based
                on my knowledge, this report does not contain any untrue statement
                of a
                material fact or omit to state a material fact necessary to make
                the
                statements made, in light of the circumstances under which such statements
                were made, not misleading with respect to the period covered by this
                report;




3.
            Based
                on my knowledge, the financial statements, and other financial information
                included in this report, fairly present in all material respects
                the
                financial condition, results of operations and cash flows of the
                registrant as of, and for, the periods presented in this
                report;




4.
            The
                registrant’s other certifying officer(s) and I are responsible for
                establishing and maintaining disclosure controls and procedures (as
                defined in Exchange Act Rules 13a-15(e) and 15d-15(e) ) for the registrant
                and have:




(a)
            Designed
                such disclosure controls and procedures, or caused such disclosure
                controls and procedures to be designed under our supervision, to
                ensure
                that material information relating to the registrant, including its
                consolidated subsidiaries, is made known to us by others within these
                entities, particularly during the period in which this report is
                being
                prepared:




(b)
            Evaluated
                the effectiveness of the registrant’s disclosure controls and procedures
                and presented in this report our conclusions about the effectiveness
                of
                the disclosure controls and procedures, as of the end of the period
                covered by this report based on such evaluation;
                and




(c)
            Disclosed
                in this report any change in the registrant’s internal control over
                financial reporting that occurred during the registrant’s most recent
                fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
                annual report) that has materially affected, or is reasonably likely
                to
                materially affect, the Company’s internal control over financial
                reporting; and




5.
            The
                Company’s other certifying officer(s) and I have disclosed, based on our
                most recent evaluation of internal control over financial reporting,
                to
                the registrant’s auditors and the audit committee of the registrant’s
                board of directors:




(a)
            All
                significant deficiencies and material weaknesses in the design or
                operation of internal control over financial reporting which are
                reasonably likely to adversely affect the registrant’s ability to record,
                process, summarize and report financial information;
                and




(b)
            Any
                fraud, whether or not material, that involves management or other
                employees who have a significant role in the registrant’s internal control
                over financial reporting.












Date:
        May
        8, 2007
 /s/
        D AVID S EATON
  
 David
        R.
        Seaton
 **Chief
        Financial
        Officer**


36





Exhibit
      32





**CERTIFICATION**








Pursuant
      to the requirement set forth in Rule 13a-14(b) or Rule 15d-14(b) of the
      Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63
      of
      Title 18 of the United States Code (18 U.S.C. § 1350), Christopher Naughton, the
      President and Chief Executive Officer of Marshall Edwards, Inc. (the
“Registrant”), and David R. Seaton, the Chief Financial Officer of the
      Registrant, each hereby certifies that, to his or her knowledge:





1.
            The
                Registrant’s Quarterly Report on Form 10-Q for the period ended March 31,
                2007, to which this Certification is attached as Exhibit 32 (the
“Periodic
                Report”), fully complies with the requirements of Section 13(a) or Section
                15(d) of the Securities Exchange Act of 1934, as amended;
                and


2.
            The
                information contained in the Periodic Report fairly presents, in
                all
                material respects, the financial condition of the Registrant at the
                end of
                the period covered by the Periodic Report and results of operations
                of the
                registrant for the period covered by the Periodic
                Report.





These
      certifications accompany the Form 10-Q to which they relate, are not deemed
      filed with the Securities and Exchange Commission and are not to be incorporated
      by reference into any filing of the registrant under the Securities Act of
      1933,
      as amended, or the Securities Exchange Act of 1934, as amended (whether made
      before or after the date of the Form 10-Q), irrespective of any general
      incorporation language contained in such filing.





Dated:
          May 8, 2007
 
 
 
 
 
 /s/
                    CHRISTOPHERNAUGHTON
                /s/
                    DAVIDSEATONChristopher
                    Naughton
                David
                    R. SeatonChief
                    Executive Officer
                Chief
                    Financial Officer